On the Move: Unilever, Adidas and BMW
From Standard & Poor's European MarketScope
TOTAL (TOT ) was up €5.30 to €216.30. SocGen expects third quarter underlying profit of €3.1 billion, up 31% year-over-year and up 7% from the second quarter. The broker said continuing share buybacks will boost EPS growth to 35%. Morgan Stanley expects third quarter net income of €3.021 billion, up 28% year-over-year. Cheuvreux expected adjusted net income of €3.047 million vs a consensus range of between €2.8 billion and €3.2 billion. ING expected third quarter operating profit of €6 billion, with €2.8 billion net profit and adjusted EPS of €4.78 per share.
VIVENDI UNIVERSAL (V ) was up €0.60 to €26.70. The company unveiled better-than-expected third quarter sales of €4.874 billion, up 12% OR 8% like-for-like; while 9 million sales are up 10% to €12.759 billion, or up 8% like-for-like. The market forecast third quarter sales of €4.76. Universal posts nine months sales up 5% and but third quarter sales are down 1.5% like-for-like due to tough comparables. Vivendi Universal Games nine months sales are up 88% year-over-year, with third quarter sales up 151%, driven by the success of World of Warcraft. SFR also shows strong nine months sales up 21.2%. the company expects to beat its fiscal 2005 forecasts earnings.
PUBLICIS (PUB ) was up €0.09 to €27.66. The company published third quarter revenues of €1.001 billion, +7.4%, representing organic growth of 6.2%. It said new business reached US$2.10 billion (€1.70 billion) and expressed confidence in prospects for organic growth (at least 6% in the fiscal year) and profitability announced at the end of July. Meanwhile, UBS raised the stock's price target to €32 from €31 and kept its buy recommendation. Cheuvreux said third quarter organic growth was above first half and management confirmed the fourth quarter should continue that trend, at least. The broker kept its selected list recommendation and €31 target price.
VW was down €0.36 to €44.87. The VW brand made a loss in the third quarter but reaffirmed that it will make a profit in fiscal 2005. The company posted a nine months operating profit of €1.96 billion and pretax profit of €1.1 billion. Third quarter operating profit came in at €586 million after one-offs. Pretax profit was €432 million. It kept 2005 earnings guidance unchanged.
BMW was down €0.68 to €35.67. The carmaker's third quarter pretax profit slid more than expected to €647 million (consensus view €739 million) on quarterly sales of EUR 11.72 billion, a touch higher than expected. The company reiterated that it sees 2005 profit roughly flat year-over-year. Merck Finck says the figures are better than they look at first glance, noting that EBT and net income were significantly below its and consensus expectations. However, EBIT was above expectations. Says the main reason for the low EBT and net income was a €175 million burden in context of the exchangeable bond on Rolls Royce, which has nothing to do with the operating performance. The broker rated the stock a hold
ADIDAS was up €2.42 to €144.47. According to market talk the company is expected to make a capital hike announcement this evening to finance planned US$3.8bn acquisition of Reebok (RBK ), according to market talk. Third quarter net income beat forecasts rising 28% to €209 million, when adjusted for the sale of the Salomon unit. Quarterly sales rose 9% to €1.92 billion, driven by growth in North America and Asia. The company reaffirmed that it expects net income to rise by at least 20% for the year as a whole.
ALITALIA was up €0.25 to €6.26. Banca Intesa, Deutsche Bank (DB ) and ten other banks are set to guarantee the company 's capital hike, according to the Italian press. The deal is expected to be completed by the weekend, ahead of the airline's Monday board meeting.
VALENTINO was up €0.17 to €20.11.The company 's board will propose to swap all its saving shares into new ordinary stock at a ratio of 1:1.
Nordic br> SKANSKA was up SEK58.5 to SEK122.00. The company's third quarter 2005 net profit came in at SEK973 million against SEK1.839 million in 2004, on sales down 0.58% year-over-year to SEK32.199 billion. The company remained cautiously optimistic in its outlook for the Nordic market. It said the outlook for Latin American oil and gas projects is good, adding that the Czech Republic and Poland continue to show growth. UK construction volume is low, but the US market is strong, the company said.
Spain br> TELEFONICA MOVILES was up €0.19 to €9.14. The company announced that third quarter net profit was up +24% to €615 million. Nine months net profit reached EUR 1.543 billion, up 8.8%; nine months EBITDA came in at €4.23 billion. The numbers were slightly ahead of average forecasts. Revenues rose 45.9% in the third quarter and 45.3% in nine months to reach EUR 12.05 billion. The company said synergies from the integration of BellSouth (BLS ) assets are already having a positive impact on its income statement.
Switzerland br> SWISSCOM (SCM ) was down CHF0.75 to CHF424.50. Yesterday, Irish phone company eircom confirmed that it has received a bid approach, although a suitor was not named. Citigroup (C ) thinks Swisscom is the most likely acquirer although it believes Belgacom cannot be ruled out. The broker said this would be another attempt by the company to financially engineer its balance sheet. It argued that increased leverage helps (0.9x net debt to EBITDA fiscal 2006 on broker's numbers) but is not the cure and thinks other deals are needed longer term. The broker maintained its hold rating.
UNILEVER (UL ) was down £0.20 to £5.61. The company reported third quarter sales of €10.22 billion, up 4%, it was up 2% constant currencies and had an operating profit of €1.59 billion, down 4%, down 6% constant currencies. The pre-tax profit was €1.45 billion, down 4%, down 5% constant currencies; net profit from continuing operations of €1.025, down 11%, down 12% constant currencies. Underlying sales grew 3.5%, entirely from volumes. The company proposed an interim dividend of €0.66 per NV shares and 6.77p per PLC.
BARCLAYS (BCS ) was up £0.13 to £5.84. Deutsche Bank (DB ) added the company to its Pan European Focus List. CSFB increased EPS estimates for 2005 by around 5% and 2006 by 2%, to 55.4p and 62.9p respectively. Forecasts reported EPS (the basis for analyst comparisons) of 54.3p and 60.6p.
TATE & LYLE was up £1.29 to £6.00. The company reported first half Pre-tax profits before excepts and amortisation of £136 million, +7%. The outfit said Splenda Sucralose sales rose 19%, Meanwhile it plans a 100 million expansion plan at its US Loudon and Sagamore facilities. While higher energy and transport costs will be a factor, the company expects fiscal year results to reflect satisfactory progress.
ROLLS-ROYCE was up £0.10 to £3.82. Merrill Lynch downgraded the company to neutral from buy, noting that the stock is up 47% since May and is now trading on a significant premium to both the European sector and the UK market. The broker thinks this premium is justified with double digit earnings growth for at least the medium term, but found it difficult to see material upside from here.
Prepared by Zaida Espana, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)